Yes it is that time of the year again! Financial year 2012 has ended, financial year 2013 has commenced and we have all attended one or more EOFY (End of Financial Year) parties enjoying free food and drinks, courtesy of employers.
The first four months of the new financial year is also the window of opportunity for everyday, average taxpayers to lodge their tax returns. As everyone is scurrying to do their tax returns and eagerly waiting for their much-desired, much-sought after and much-needed tax refund, some people may be left scratching their heads wondering about the best means of utilising the dough.
Here, I have listed six ways of putting your tax rebate to good use:-
1. Contribute towards your mortgage – If you have a mortgage then you can cross your heart and close your eyes while making a decision to pay off your mortgage. Thanks to our high mortgage interest rates, if you decide to turn your back to your house mortgage then it may take years to pay it off. Pooling your savings and utilising your annual tax refunds (if you have any) in paying off your mortgage is a smart move. Why drag on the mortgage payments and pay the banks your hard-earned money over thirty years or more when you could pay it off much earlier.
2. Pay off your credit card debt – You heard me! Your tax refund could be your ticket to a debt free life. Depending on how significant your refund is and how substantial your debt is, you have a good chance to finally get rid of your credit card debt and live a debt free life. Freedom beckons!
3. Make a super contribution – You can choose to use your rebate in making a voluntary contribution into your super fund. You will receive a co-contribution from the government for every dollar you will contribute. Even if you are already making voluntary super contributions on a monthly basis, if your retirement savings need a bolster then do mull over the possibility of making investment into your super.
4. Engage in retail therapy – If you didn't like ideas 1, 2 or 3 then you could use your tax refund money to sponsor a trip(s) to your local shopping precinct. Why not take advantage of the EOFY sales encompassing all aspects of our professional, social and personal lives and go on a shopping spree (within your means ofcourse). Not only would you land lucrative bargains but could also stock up for occasions like Christmas and New Years.
5. Do something unique or exemplary – Maybe this year your tax refund could be the doorway to finally do that extreme sport you have been itching to do or take that holiday you always wanted to go for. Why not spend the tax refund in buying some vouchers for skydiving or bungee jumping. Check out the redballoon website for some exquisite ideas about mind-blowing and spine-tingling adventures.
Perhaps you could take the leap of faith and finally go for a holiday to New Zealand, South America or Europe and wallow in the benefits of having a strong Australian dollar. If extreme sports are not your thing or you cannot be bothered to pack your luggage for an overseas trip, then grab that backpack of yours for a nice weekend trip to some local tourist attraction or a week of pampering and relaxation in a local resort. Explore and discover breathtakingly beautiful Australia!
6. Deposit the money in a high interest earning bank account – If ideas 1,2,3,4 and 5 do not entice you or you wish to create a/add to your nest egg then you can opt for a high interest earning saving or term deposit account. Look around, do some research and you will be on your way to putting away your tax refund money in a bank account that earns your high interest. Deposit the tax rebate in a high interest earning account and let compound interest do its magic! Have a look at Ubank for some of the highest interest earning accounts out there.